Key facts
- CMS projects Medicare Advantage premiums to drop over 16% to $12/month in 2027.
- Insurers are focusing on margin recovery over growth, leading to reduced plan footprints.
- Humana reduced its plan footprint by 19% of its retail membership, affecting 942,000 members.
- UnitedHealth and CVS Health also reduced plan offerings.
- Average prescription drug premiums in MA are projected to fall 38%.
The Centers for Medicare & Medicaid Services (CMS) projects that the weighted average monthly premium for Medicare Advantage (MA) plans will decrease by more than 16% to $12 in 2027, down from $14.37 in 2026. This projection, released on Monday, offers the first outlook ahead of the Medicare Open Enrollment period, which runs from October 15 to December 7, 2026.
The anticipated drop in premiums reflects insurers' current strategies, which prioritize recovering margins over expanding enrollment. This shift is leading some health insurers to reduce their market presence in less profitable areas. For instance, Humana is estimated by Barclays to have exited 3,995 plans, impacting approximately 942,000 members, or 19% of its retail MA membership. UnitedHealth and CVS Health have also scaled back their plan offerings, while Elevance maintained a largely stable footprint.
CMS estimates that MA enrollment will reach 34 million in 2027, representing 47.4% of all Medicare beneficiaries, though the agency anticipates actual enrollment may be higher. The agency also forecasts a significant 38% decrease in average prescription drug premiums within MA plans, while standalone Part D plan premiums are expected to rise by less than $1 per month. According to CMS, over 99% of Medicare beneficiaries will have access to at least one MA plan, and 97% will have access to 10 or more options.